Buoyed by IMD forecast of normal monsoon, good Q4 results and strong inflows from DIIs; market continued its winning streak for the fourth consecutive week despite volatility in global markets and crude touching multi-year highs during the week ended.
Benchmark indices the Sensex closed at 34,416, up by 223 points or 0.65 per cent while the Nifty closed at 10,564, up by 83 points or 0.8 per cent.
The S&P BSE Mid-Cap index and S&P BSE Small-Cap index inched by 0.7 per cent and 1.07 per cent to close at 16,799 and 18,178 respectively.
The shortage of cash at ATMs and banks is stoking fears of a repeat of the chaos of November 2016. Unlike the 2016 cash shortage, which was the result of government policy, this one is driven by public nervousness. If not addressed quickly by the RBI, it could slow the pace of economic expansion — as consumption in regions facing the cash squeeze droops and small businesses run out of working capital — and erode the public’s faith in the banking system.
With crude oil prices touching four-year high of $74 a barrel, diesel price has hit the highest level ever witnessed in country’s history, while petrol price has touched a near five-year high. Oil prices have also been supported by resurgent appetite for energy around the world. Global oil demand grew during the first three months of 2018 by the most since late 2010.
Near-term trend will be dictated by Q4 results, FII and DII activity, F&O settlement, the movement of rupee and oil price movement. For the week ahead, chartists predict range of 33,800-34,850 and 10,375-10,750 for the indices.
Stock Scan
Lemon Tree Hotels operates a chain of upscale business and leisure hotels and is India’s largest chain in the mid-priced hotels sector and third largest overall, on the basis of controlling interest in owned and leased rooms. The company designs, builds, owns and operates its hotels. The company offers three brands across various levels. Lemon Tree Hotels offers in-room amenities, cafe, recreation bar, pool and fitness center. It also offers business center and meeting rooms It also offers resorts, such as Lemon Tree Amarante Beach Resort, Goa and Lemon Tree Vembanad Lake Resort, Kerala. Buy on declines for target price of Rs 150.
Kaya Limited offers a comprehensive range of solutions that cater to a wide variety of consumer needs like Anti-aging, Brightening and Pigmentation, Acne and Scars, Laser Hair Removal, Hair Loss and Beauty Facials. It provides healthcare aesthetics, beauty and personal care products and services in India and abroad. The company has the largest international chain of skincare clinics in Middle East and has presence in e-commerce segment. Buy for target price of Rs 2,000 in medium term.
Datamatics Global Services is a global provider of IT, data management, BPM and consulting services to several Fortune 500 companies. The company has a fully integrated offering to support the digital transformation of organisations through Smart Processes, Smart Systems, Smart Devices and Smart Data. These solutions are powered by Robotics, AI and machine learning algorithms which offer improved business efficiency in the interconnected world.Buy for target price of Rs 225.
Futures & Options
Ahead of settlement week, the derivative segment witnessed brisk trading. Sentiment indicators like VIX, open interest, put/call ratio and implied volatility suggest mild correction in near term.
Highest open interest in the option segment was seen at 10,700 call strike and 10,500 put strike. Nifty range of 10,400-10,700 levels is predicted for the near future.
For Bank Nifty Futures, the highest open interest is placed at 25,500 call strike and 24,000 put strike. Track rollovers to spot possible winners of next series.
FMCG, Metal and IT counters were biggest gainers, rising 4-5 per cent while PSU Banks lost the maximum. Reporting healthy earnings and good outlook for FY19, TCS triggered rally in IT stocks. Use declines to buy TCS, HCL Tech and Wipro.
Aluminium and Nickel are leading the rally in base metals at LME with gains of 14 per cent and 19 per cent in last three months. Outlook looks good for both ferrous and non-ferrous industries. Buy on declines Hindalco, Vedanta, Tata Steel and JSW Steel.
With crude oil prices surging to three year highs, OMCs are on weak wicket. Mild weakness to continue for some more weeks, say watchers.Bank stocks continued to face selling pressure. Avoid for present. Apart from petrochemical and refinery businesses, telecom is the major component to look for in results of Reliance.
Results of Maruti Suzuki may give “fizz” to other auto stocks. Punters expect positive news from the management. Stocks looking good are Arvind, DCB Bank, Hindustan Zinc, Motherson Sumi, NALCO, NIIT Tech, Tata Global, Wockhardt and Wipro.
